Energy, Industry and Mineral Resources Minister Khaled Al Falih said that under the plan Saudi Arabia will be “a very strong competitor in renewable energy”, and will implement “massive” projects to produce more natural gas.
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The creation of non-government jobs will focus on developing Saudi industry in a range of sectors, from renewable energy to auto manufacturing to tourism.
“Last year there was near-panic among the prince’s advisers as they discovered Saudi Arabia was burning through its foreign reserves faster than anyone knew, with insolvency only two years away”. The Cabinet stressed that the approval by the GCC leaders of the “Economic and Development Affairs Commission” and the basic law of the “Economic Judicial Commission”, as well as the holding of a joint periodic meeting of defense, interior and foreign ministers to coordinate policies among GCC countries would have great impact on the march towards cooperation, coordination and integration in the economic and development fields.
Although Saudi Arabia leads the world in oil production, its gas output is limited, which means the country may need to consider foreign sources. Saudi Arabia created an Islamic coalition against terrorism with its neighbours earlier this year, but excluded Iran. The majority of Saudi nationals – about 70% – are now employed by the government.
Falih, who is also Aramco’s chairman, indicated earlier this month that the energy giant would be interested in investing in global upstream opportunities, particularly in gas. Lately, oil and gas exploration and production companies have been battered by a monumental slide in crude oil prices. The so-called National Transformation Program offers details on how the ruling monarchy plans to achieve long-term economic change in an era of cheap oil.
Even so, once the cost of constructing an LNG terminal in Saudi Arabia is amortised and factored into calculations along with third-party charges, the price of the gas it would receive would nearly double.
Saudi Arabia plans to sell bonds for the first time to worldwide investors as the kingdom tackles a widening budget deficit caused by cheap oil, according to the country’s finance minister.
The plan which is aimed at boosting the country’s non-oil revenue to US$141 billion, by the year 2020, was proposed in April by Deputy Crown Prince Mohammed bin Salman. Aramco discovered five new oil and gas fields past year, including two non-associated gas fields. The company also found three new gas reservoirs in its existing fields.
This could come from local sources or, for the first time, from imports, he said, something Saudi Arabia has been considering since at least 2013.
According to the NTP, the government will strive to reduce the value of public salaries and wages as a proportion of the budget to 40% from 45% by 2020, and cut water and electricity subsidies by 200 billion riyals.
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On December 28 a year ago, Pradhan had sprung a surprise by asking the three state-run oil refiners – IndianOil, BPCL and HPCL – to get ready to set up the largest refining and petrochemicals complex in the public sector before 2017-end on the west coast of Maharashtra with an investment of Rs 1.5 trillion.
